1. Omkar when he started the hotel and brought in his college study colleagues for jobs in his venture treated everyone as friends or extended family members and not as a boss - subordinate relationship. It was a very informal, casual and friendly atmosphere which the employees loved to work in. It had made them owners or you can CEO's of their individual functions with the freedom to do and express their work as they wished that ultimately resulted in customer delight to whosoever came to the Hotel be it for overnight stay or for wedding and other functions. So it was a very free-wheeling leadership style deployed by Omkar and not that of micro-managing. It created an atmosphere of trust, high levels of employee engagement and satisfaction wherein work timings did not matter to them as long as they got to do what they wanted to do and were enjoying it. This sort of work culture is very important in pure service industry like hospitality where the staff is in direct contact with the customers and every touch point can lead to satisfaction or dissatisfaction with them.
The thing that went wrong is when the hotel business of Omkar started expanding, doing good and started generating more revenue and profits and Omkar suddenly felt that he needed to take his hotel brand to the next level and thus grow. So the decision that he took to tie-up with a leading 3-star hotel brand who managed many properties by lending their brand name without consulting his fellow staff did not go down well with them as earlier the work culture and atmosphere existed as if all were owners of the hotel and it was a family culture and now suddenly the decision to tie-up with a 3rd party. This decision of Omkar to bring in change without consulting everyone is probably what went wrong. Here suddenly comes to the fore personality of Omkar that I am the boss or the owner and that I don't need to consult anyone for taking decisions. This is what triggered the chain of reactions and resistance to change by all the staff employed.
2. Yes, there was a total perception gap between Omkar and his team members due to lack of communication between them and given the fact that Omkar didn't consult them or take note of his team member's views when making this big change management decision. The fact that Omkar just delegated the audit report/observation mail of the property management company to Neeraj and instructing them to act on the observations and prepare for the change that was coming their way did not go down well with his team. Suddenly the work atmosphere had changed from being friendliness to more formal with strict adherence to protocols and laid down procedures to follow with no questions asked, etc. Omkar should have spoken to all of his team members about the change that was coming in place, what to expect, why the need to change the working styles from informal to formal and why the need to act on the observation mail, etc. There should have been an open one to one heartfelt discussion amongst all of them. Probably this would have helped things become better and lightened up the current tense atmosphere a bit. This would have also helped make the team members meeting with MD of property Management Company better and easier to deal with. Lack of proper communication amongst all stakeholders involved and the fact that Omkar had suddenly become hierarchical by just giving instructions and expecting his team members to follow them just didn't seem right or the proper way to go about it. Omkar had failed to build up a ready consensus amongst his team in this initiative.
3. Change is difficult, and many people not only resist it but seek to undermine it. Successful efforts in organizational change are done not with bribes, coercion, shaming, or cajoling, but by enabling others within their organizations to drive change themselves. Preetam was emotionally attached to the hotel by virtue of being a founding employee and having been there right from the beginning. Infosys Founder Dr. Narayana Murthy once said that Love your job but don't love your company, because you may not know when your company stops loving you. This quote probably held true for Preetam. Because she had been questioned by the auditors of the property management company on her current working style and instructed to change her working style. In all her formative years, Preetam had never been questioned like this but all of a sudden her authority was questioned. Preetam did not see the change coming favorable to her, whether it was aligned to her own personal goals. It did not help the matter that Neeraj who had been tasked by Omkar for this could not do much on his part as he was also insecure about his position and did not have a clear idea about what the future held for him, then in what position he would be to help others.
4. Launching major transformation efforts is a common way that business leaders try to get a leg up on the competition, or just keep their heads above water. But too many of these efforts fail. Change is difficult, and many people not only resist it but seek to undermine it. Unsurprisingly, then, a McKinsey study found that merely 26% of transformation initiatives succeed. Most successful transformations have one thing in common: Change is driven through empowerment, not mandated from the top. Successful efforts not only identify resistance from the start but also make plans to overcome those who oppose the transformation.
As advisor to Omkar, the following would have been my suggestions for coming out of the situation and proceed with the new arrangement and keeping the team intact too simultaneously.
i) Start with a small group. Most successful transformations begin with small groups that are loosely connected but united by a shared purpose. They're made of people who are already enthusiastic about the initiative but are willing to test assumptions and, later, to recruit their peers. Leaders can give voice to that shared purpose and help those small groups connect, but the convincing has to be done on the ground. Unless people feel that they own the effort, it's not likely to go very far. So Omkar should have done that. Communicate to his team the change coming their way, convince them why it's required, how it will help them and the brand that they helped build from beginning to also grow and the fact that they will also grow along with it.
ii) Identify a key change or a "vision for tomorrow" that will not only address the team's existing grievance but also move the organization forward and create a better future. This vision, however, is rarely achievable all at once. Most significant problems have interconnected root causes, so trying to achieve an ambitious vision all at once is more likely to devolve into a five-year march to failure than it is to achieve results. That's why it's crucial to start with a keystone change, which represents a clear and tangible goal, involves multiple stakeholders, and paves the way for bigger changes down the road. In the case of Omkar's hotel property, it was all about taking it to national level with innovative guest services and by adding more rooms to the property and by also building a new hotel property.
iii) Effective leadership is all about "a complex system of relationships between leaders and followers, in a particular context, that provides meaning to its members". Every large-scale change requires both leadership at the top and the widening and deepening of connections through wooing - not coercing - an ecosystem of stakeholders. This can be achieved by creating a platform for collaboration that brings together everyone through meetings, formal & informal interactions, workshops, trainings, conferences, etc. Omkar should do this for his team. Thus the employees will feel more involved, more knowledgeable, educated, more empowered, etc.
iv) Often the most dangerous part of any transformation effort is when the initial goals have been met. That's why successful transformation leader's focus not only on immediate goals but also on the process of change itself. Get the employees to embrace the new methods as laid down by the property management company and thus keep company moving forward.
Mihir Gosalia, Pune