Communication Systems Change Project for Costco

Wholesale Location 314

Project Overview
Organization:
Costco Wholesale Corporation owns a number of international locations which are membership
based retail warehouses. Each warehouse contains a number of different departments
which members can find value priced products and services, along with a variety of
different products on the sales floor.
The Need:
Currently, not at all departments of the warehouse and employees on the sales floor have a way
to communicate with other people in the warehouse. This requires that the employee must
stop what they are doing to go seek the person they need to speak with.
The Change:
The implementation of a new telephone system, with the capability to transfer calls to and from
every department. The implementation of a public address (PA) system to provide the
ability to communicate with every person within the warehouse. Along with, the
expansion of the current two-way radio communication system to include every
department and every employee on the sales floor.
Obstacles to Change:
The obstacles to this change are the costs associated with the training and implementation of new
communication systems, convincing the stakeholders of the importance and value of the
change project, and the resistance which might arise from the change.
Strategy and Design:
The communication change project is designed to improve the functionality of the
communication systems within the warehouse, and to improve the member experience
with the system. The best way to begin this change is to talk about the project and the
benefits it could bring. Those impacted by the change must be informed of the change
and the process. The formal aspects of the change would be the development of a change
team and the decisions around which materials to use for the change. The informal

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aspects of the change project would be the collection of data and the communication
about the project to those impacted by the outcomes.
The best way to motivate change within the Colchester Costco warehouse is to get people
excited about the change. This will be done through:

Written documentation

Information guides

Training sessions

Surveys and data collection.

Timeline:
Week 1: Project begins, training process is initiated
Week 2: Official training begins, implementation of new systems
Week 3: Continued training, system issues addressed
Month 1: Training continued but coming to a close, progress status reviewed
Month 4: System fully introduced, focus shifting toward customer use of the system, feedback
collection
Year 1: Project closing processes, project transition into normal practices
My Role:
I would like to share the idea of change and try to inspire actions. I will not be involved in the
implementation process, or part of the change team. Inspiring change within the
organization would involve showing management what the problem is with plenty of
factual evidence and data to support the need for change. Once the change is accepted,
my role could include motivating others and promoting the change. This would involve
demonstrating to others how easy and effective the new systems are once learning how to
use them correctly.

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Communication Systems Change at Costco

Wholesale Corporation
Alexis Langlois
Organizational Behavior and Management
May 1, 2014

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Executive Summary
This document contains proposed changes for the current communication systems at
Costco Wholesale location 314, Colchester, Vermont. Costco Wholesale Corporation owns a
number of international locations which are membership based retail warehouses. Costco
Wholesale relies upon its rate of membership in order to achieve profits. Each warehouse
contains a number of different departments which members can find value priced products and
services, along with a variety of different products on the sales floor. Currently, the
communication system between these departments consists of a limited number of two-way
radios, along with a telephone system. Not every department has a radio or phone accessible to
them. This requires a significant amount of time to locate and transfer messages between
different departments, the employees on the sales floor, and the supervisors and managers on the
front-end.
The suggested change to be implemented would be an expansion of the two-way radio
system to include all departments, an update to the telephone system which allows for customers
to be transferred to and from any department, and a new public address (PA) system to have the
capability to communicate with the entire warehouse. These changes would increase the
efficiency and effectiveness of the communication system at the Colchester, Vermont location of
Costco Wholesale. The document further addresses how these changes would improve
communications for employees, managers, and customers alike.
Further outlined is the organization, the suggested change, the roles and responsibilities
of people involved with the change, the stakeholders and collaborators, the enablers and
obstacles, the strategy and design, the timeline, and the role of the change agent. The change

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process is essential for improvement of communication throughout the warehouse. It will

provide increased efficiency and effectiveness of all warehouse communications.
A: Organization
Costco Wholesale is a fast-paced retail organization. The strategy of the corporation is to provide
cost leadership by selling products in bulk amounts. In order to shop at Costco, customers must
purchase a membership, which has an annual fee. This membership provides access to the store,
along with many other offers and benefits. The organization uses these factors to promote
membership rates and to build success (Company Profile). The work environment of Costco
Wholesale is a warehouse type store. This means that products are displayed on pallets
throughout the many aisles of steel storage shelving which holds the rest of the warehouse
inventory.

The warehouse floor plan is an open layout, with different departments throughout the
warehouse. The front of the warehouse is where the membership department, register systems,
and the main office are located. The back of the warehouse is where the receiving dock and
merchandise management takes place. Around the exterior of the warehouse, different
departments, such as optical, pharmacy, bakery, deli, and others are located to maximize product
storage and display capacity. The front of the warehouse tends to be the main focus of the daily
operations. At any given time, there may be more than 100 employees working throughout the
warehouse. Communication across the warehouse consists of a phone system which connects
some but not all departments within the warehouse, and a two-way radio system which connects
some of the employees working on the floor, with managers and supervisors in the main area of
the store. The exterior departments in the warehouse may have a phone system or the two-way

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radio communication, while some departments have both, and others lack a communication
system altogether. To understand how this might impede operations, the viewpoint of a
departmental worker must be assessed.
The different departments of the warehouse must be able to communicate with managers and
supervisors located in other areas of the store. As a major sales assistant, my job is to aide in the
selling of high value items and answer member questions which come through customers in the
warehouse and phoned in questions. The department which I operate in has communication with
others through a cordless telephone system and through the two-way radio system. There are
three cordless handsets for the phone system and three two-way radios for the employees who
work in the major sales department. The communication between the major sales department and
the other areas of the warehouse is ineffective, even with the provided systems.

B: Change
The current communication system that exists at the Colchester, Vermont location of Costco
Wholesale has many flaws and can often times produce improper interaction and inefficient
solutions to operational situations. Many situations in the Colchester warehouse require
employees to move to other areas of the warehouse to find certain people that they must
communicate with. This is inefficient in many ways and causes the improper interpretation of
messages and slow communication. This can impact the members experience in the warehouse
and can create hostile situations. Along with this, safety communication can become an issue,
due to the lack of access to a communication system in many areas of the warehouse. If a child is
missing in the warehouse, there is no easy way to locate them, like a public address (PA) system.
This requires that a number of employees must go looking for the child on the floor. This has

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proven to be a difficult task, especially on a busy day, when the warehouse can contain more
than 1,500 people at any given time. Along with this, if an event were to occur where people in
the store needed to be notified of procedures for safety, there is no efficient way to transfer this
message. A change in the communication system would improve the efficiency and effectiveness
of communication throughout the warehouse. By updating and expanding current telephone and
two-way radio communications throughout the warehouse and implementing an intercom (PA)
system the operational activities could be improved. This change impacts a majority of the
employees who work at Costco Wholesale and it also affects the member experience within the
store.

Changing the communication system that currently exists at Costco wholesale would produce
significant improvements in the accuracy of information being transmitted and the amount of
time it takes to pass information. Updating the communication system for Costco Wholesale
would need to be implemented in a particular way in order for the transition to take place
smoothly. Updating the telephone system which currently exists at Costco would require a new
phone system which can connect every department, along with the ability to transfer calls back
and forth between departments. The current system does not allow for this, has multiple numbers
to call, and can be terribly confusing for the members. After the implementation of the phone
system, the staff would have to be taught how to use the system properly and effectively. The
menu system on for telephone communications would also have to be updated for ease of use.
Other changes to the communication system must take place.

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The other updates to the communication system would help to improve the current system in
multiple ways. The two-way radio system should be expanded. This would not require training
and would be relatively easy to implement. The current system of two-way radio communication
that exists works moderately well. The devices would need to be updated but would require no
training. The final update to the communication system would be the implementation of an
intercom or a public address (PA) system. This system could be controlled from a central
location which also has portable access points. This would take a minimal amount of training for
the employees and managers. The members who experience the system may not be extremely
affected by the change, although, it would provide a sense of security and a more efficient
manner of communication.

The process of changing the communication system at the Colchester, Vermont Costco
Wholesale would provide relief to employees and customers alike. The efficiency of a new
system would make it easier for employees to communicate with whomever they may need. This
would save time for them and might increase job satisfaction. The sense of security the new
system might provide members would also be exciting. The process would provide change for
improvement, which, might be resisted at first, but would provide a positive impact overall.

The success of these changes would allow the organization to improve overall communication on
every level. The communication between employees on the floor, managers on the front-end, and
customers on the telephone system would be improved dramatically. These changes would
enhance the efficiency and effectiveness of the current communication that exists. The
organization may be able to see measurable improvements in areas of efficiency, job satisfaction,

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and member experience. The organizational change would create a solid communication system
between all areas of the warehouse. Along with this, the PA system would allow for storewide
communication to take place. This would produce a more desirable work environment and
shopping environment.

The vision for change within the organization is to see a successful communication system. In
order for this change to be achieved, an update must be made to the current system that is in
place. The changes provide the organization with the capability to communicate instantaneously.

Elevator Speech: Mr. Hogan, I have a solution to wasted time and money at the Colchester
Costco Warehouse. There is a simple way to increase efficiency and effectiveness of the
communication system that currently exists in the warehouse. The ability to communicate with
any department throughout the warehouse, to communicate with any employee, and to conduct
and process telephone communications without difficulty comes with a new communication
system. The benefits of this system would reach all employees of the warehouse and the
members which we serve. This change would be successful at the Colchester Costco Wholesale
warehouse and the change will improve efficiency and effectiveness.

C: Change-Making Role
When making a change within an organization, there must be someone to lead the
transformation. The lead change agent is in charge of organizing and maintaining the changes as
they take place and putting together the right team and resources required for successful change
completion. My current position in the organization does not put me in the proper place to be the

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lead change agent. There are no current change agents existing for this potential transformation,
however, there are people in place that could become the lead change agent. The managers that
handle day-to-day operations and the implementation of warehouse upgrades would qualify for
the lead change agent role. There are additional steps which must be taken to build the
environment for change.

For a successful change to take place, a change network must be developed. Once this potential
pool of team members is developed, the structure of the change can created. At this point, I could
become a catalyst for the change. This can be accomplished through assisting the change
development and guiding the managers toward the development of a change team. During this
process, the managers would be informed of the idea for change and of the possible
improvements that could be the outcome. Due to my limited role in the organization, it would be
difficult to guide the change process.
My current role in the organization is unrelated to the decision making area of the organization. I
have little influence over how changes take place, however, there is the possibility of being a
facilitator to change. The formalization of the organization makes it difficult to be a part of the
change process. I have the opportunity to introduce and convey the change, although, once the
process begins, I will have very little input as to how the process occurs and the overall outcome
of the change. Those who are responsible for the change are stakeholders of the change and
collaborators who would also have an impact on the change program.

D: Stakeholders and Collaborators

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The change project key stakeholders within the organization would be the general manager, Paul
Hogan, and the assistant general managers of the warehouse. Along with this, the change would
impact those who manage employees, which are staff level managers. The general manager of
the warehouse is responsible for changes such as the communication system update. He is the
primary stakeholder. The assistant general managers would be responsible for the process and
overall outcome of the change. The staff level managers would be stakeholders in the process
due to the responsibility that will be placed upon them from the assistant managers. Other
stakeholders of the change project are the individual employees affected by the change and the
members that are impacted by the change.

Each stakeholder plays a different role in the implementation and success of the change project.
The stakeholders with higher level management position have more control over the structure
and development of the change. The stakeholders likely to oppose the change are the managers.
This group of stakeholders are the ones who must implement and control the change, they are the
ones responsible for the overall outcome of the change. The managers are the most influential
members of the Colchester location of the organization. They have the final say over the process
and outcome of the transformation, however, this does not mean they are the only active
participants in the change.

The change project requires many active members to achieve a successful outcome. The
managers are critical stakeholders in the change project and are the primary active participants,
although, the employees who are affected by the change should also have the opportunity to be
active participants in the change process. This could vary from a small role to a more essential

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role in the change process. Employees affected by the change may be asked to train other
coworkers to use the new communication systems. Department managers may be asked to
actively manage and assess the change project. The stakeholders that believe in the change and
wish to play a role in the change process should be given the opportunity to support the change.
The general manager and assistant managers must be part of the change team. Within this group
of people, a lead change agent would be developed. Part of the development of the change is
collecting information about the issues that currently exist and how the change will be accepted.
Collecting data about the change project would involve looking into multiple areas to assess
what is currently taking place and how those impacted by the change may accept or resist it. This
data collection would be done through surveys of all stakeholder groups. It would contain data
on how time consuming the current communication system may be and what it might cost the
organization. Other data collection would be done through interviewing employees and
members about their current experiences with the communication system. This would take place
on a group basis or a written survey. The survey for employees would address whether or not the
current communication system plays a role in their position, whether or not they have
experienced lost time or stress due to the current communication system, and if they have any
suggestions for an updated system. The member surveys would include questions about their
experiences within the warehouse with the communication system, and if applicable, their
experiences with the phone system currently in place. These surveys would be designed to gather
information about the current problem that exists, and how stakeholders feel this could be
improved. This process would bring about both acceptance for and resistance to a change in the
current system.

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E: Enablers/Obstacles to Making Change

Change is a process that comes with resistance. The biggest obstacle of the communication
change process will be the managers. These are the people who are most impacted by the process
and outcome of the change. The customers and employees that struggle with the current system,
would be those who enabled the process. To successfully achieve the change, those who are
resistant to the change will have to be convinced of the benefit and successful outcomes of the
process. To overcome the obstacle of resistance, the strength of member influence will be the
change factor in the process.
The member or customer of Costco Wholesale, is the most important part of business for the
organization. This is included in the mission and goals of Costco Wholesale. The communication
change project will benefit the member. This would be the most important outcome for the
company as a whole. The largest weakness of the change process would be the resistance to
change from the managers and other employees impacted by the change. Overcoming this
weakness means collecting evidence of the need for change, presenting data about who may be
affected by the change and how, and demonstrating the benefit of the change to the decision
makers. The driving forces of the process are the improvements and increased efficiencies that
will come from successful completion. The restraining force will be change resistance from the
decision makers. Resistance can be a challenging obstacle to overcome, however, to achieve
successful project completion, it must be controlled.

Change comes with resistance, no matter what scale the change is on. Successful projects
overcome resistance to change. For this project to be successful, the resistance to change
expressed by the managers of the organization must be conquered. Dealing with resistance is a

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matter of teaching. The best way to decrease resistance to change is through knowledge,
information, and the reduction of uncertainty. By informing the managers what changes need to
take place, how the change will impact people, and what the benefits are, it will increase their
awareness of the problem and the solution to the current issue. Reduction of uncertainty comes
from awareness and acceptance. The greater the number of people on board with the change, the
more likely it is that the change will be successful.

Success of the project hinders upon factually demonstrating the need for change and the benefits
that would come from the change. To increase the success rate of the project, multiple surveys
and polling techniques should be used to collect data from those impacted by the change. Along
with this, a review of the existing system must be done as a baseline for growth. Identifying the
benefit of the change project is what will increase the likelihood of success. Evidence needs to be
demonstrated to create an environment for change.

The organization as a whole, being a large corporation, makes changes at the highest level and
dictates those changes down through management. The internal drivers of change are efficiency
and effectiveness of the systems that exist. Costco Wholesale Corporation is always trying to
find new ways to be more efficient and effective in daily activities. This is what drives change
within the organization. Externally, the members or customers are the largest drivers of change.
Maintaining and increasing the number of memberships within the organization comes from
keeping members satisfied and happy. Costco Wholesale does not advertise, which means that
most of the new members of the enterprise heard about Costco from someone else. This system

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has worked well for Costco in the past, but with the business world changing at an increasing
rate, Costco Wholesale must work harder to keep membership rates growing.

Communication within the warehouse and with the customers outside of the warehouse is an
extremely essential part of daily operations. The current communication system is inadequate for
the needs of the warehouse. The lost time and revenue spent searching for employees on the
floor, trying to manage customers on the phone system, and the inability to communicate with all
departments are all problems surrounding the current phone system. The new communication
system will eliminate these problems and create a more united communication system. This
change would bring multiple benefits and is something that should take place sooner rather than
later.

The Colchester Costco warehouse and the enterprise as a whole is slow to make changes. The
organization is stuck in their old ways because it has brought growth and success to the
company. The organization is in need of change, but tends to be resistant to transformation. The
simplicity of the communication change project provides an increased likelihood for approval.
The Colchester Costco location has slowly been making small changes in the warehouse to better
the working environment and the member experience. This change process would fall into the
same category. The project cost is a negative determinant to the change, however, if the benefits
can be proven to outweigh the costs, it is likely the change will be accepted.

F: Strategy and Design

The communication change project is designed to improve the functionality of the
communication systems within the warehouse, and to improve the member experience with the

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system. The best way to begin this change is to talk about the project and the benefits it could
bring. Education and information about the project will be the convincing change factor. Those
impacted by the change must be informed of the change and the process. The change should be
formal and informal. The formal aspects of the change would be the development of a change
team and the decisions around which materials to use for the change. The informal aspects of the
change project would be the collection of data and the communication about the project to those
impacted by the outcomes. The change should take place in a regimented amount of time to
achieve minimal interference to the communication system. The change should be a public
change which is announced to inform and generate motivation to successfully complete the
transformation.

The best way to motivate change within the Colchester Costco warehouse is to get people
excited about the change. Written documentation, information guides, and training sessions
would all be ways to motivate change. These activities would occur before during and after the
change process. Surveys and data collection can also be used to motivate the change. Informing
members and employees about the coming change would be a part of this process. To achieve a
successful change, the people impacted by the change must be excited and motivated for the
transformation.

To inspire stakeholder participation, it must be evident that the change is needed and desired. To
create the circumstances for the change, there must be evidence to show that there is a need for
change. Along with this, action would be taken if the benefits of the project were evident. To
encourage the critical participation of stakeholders, employees and members must identify their

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desire for the change to take place. If all of these factors come together, there would be a strong
case to convince the stakeholders.

G: Introduction
The first steps to initiating the change project is to create a formal document which outlines the
project plan, roles and responsibilities of stakeholders and other members of management, and
gives an outlook of the project for the organization to develop a sense of how this project will
help to increase the effectiveness of operational tasks. Due to the size of the organization it is
important to communicate throughout the entire change process. If communication does not
occur, it is much more likely that resistance to the change initiative will occur. Another step in
the beginning phases of the project is to begin to develop important leaders for the change.
During this process, key management individuals and other important staff members will be
trained on how to lead a small group of individuals through the change.

The introduction of the change project will be a formal notice to all employees of the
organizations location which comes from the general manager. This notice will be posted in
common areas for all employees to have access to. There will also be a visual display set-up to
outline the key areas of the change and to introduce employees to the new type of equipment
they will be using. This will eventually become a hands on training, but to start the project, there
will just be a small glimpse. This is done to avoid overwhelming employees with the new
challenges they are being presented with. The project will increase efficiency, but new
technology is often scary for employees to think about and generally places a burden on them to
learn something new.

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The early communication plan will consist of a press release type posting for employees to read.
The press release will outline the change project, contain some type of data about how the
change will help the organization, highlight the benefits of a new telephone system, identify
important members of the change management team, and will address how employees can
formally and informally discuss any questions or concerns that they might have.

The early communication plan will be part factual, but part elevator speech. The idea is to
identify essential project facts and to get employees interested in the change by showing them
what benefit will come from the change. The essential part of the early communication plan is to
avoid resistance with those people who are impacted by the change. By communicating critical
project facts and showing the people how the project is important for the organization, it will
help to sway peoples initial impression of the project.

H: Process map/schedule/plan
As the project moves forward, there will be continual progress updates for those impacted by the
project. This includes management and key stakeholders. In the first weeks of the project,
training will begin and the new equipment will be installed. There will be weekly meetings to
address progress and issues. There will also be resources about how to operate the new systems
and how to best work with them in daily operations available to all employees and key change
members. After the first few months of the project, weekly meetings will decrease to bi-weekly
updates. Progress reports will continue, but will take place less often. Problems will be addressed
and solved. After one year the project will be integrated into regular practices. Proper project
closing procedures will take place. Throughout the entire process, changes will be communicated
to employees. Concerns will be addressed and solved in a formal process. Complaints will be

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managed and solved. Activities surrounding the change will encourage employees to continue
their efforts.

Project Timeline:
Week 1: The project beings with official project press release. Any questions, concerns, and
suggestions will be managed. Training process will begin to be implemented. Project meetings.

Week 2: Official training for the new systems will begin, starting with key change team members
and then moving to change leaders. The new systems will be installed and testing will be done.
Progress report to update project status and make any necessary changes. Project meetings for
essential change team members.

Week 3: Training of employees will occur. There will be feedback collection to deal with any
issues. Hands-on use of the new systems will begin. There will also be a progress report to
update stakeholders and make any official changes.

Month 1: There will be continued training and progress reports. During this time, project
managers will work out any problems with the systems or issues with use. There will be
continued meetings with essential change members and communication with staff to ensure
system effectiveness.

Month 4: The system will be fully introduced and employees fully acquainted. Focus will shift
toward customer use of the system and the procedure of giving proper direction when problems
arise with system use. There will also be collecting of feedback and a meeting to address issues.
There will be a progress update and any changes will be addressed.

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Year 1: Project closing processes will take place. Formal documentation of project statistics and
findings will occur. There will be an analytical breakdown of overall increases. Feedback will be
collected and adjustments will be made. The project will transition into normal practices. Project
closing activities for project stakeholders and organizational members will occur. There will also
be a project closing press release to update customers and other impacted people.

Milestones:
Week 1: Press release and training systems arrive.
Week 3: Training of employees, process initiations, and focus for the next week.
Week 4: Fully trained employees by the end of the month.
Month 4: Problems and issues fully worked out, use is regular and employees are well
acquainted.
Month 6: Documented increases in productivity.
Year 1: Demonstrated project success and project closure.
The project should follow the baseline described, however, should large issues arrive, schedules
may need to be adjusted and more focus added to training and adjustment.

The provided progress reports will be shared with employees of the organization. Positive
accomplishments will be acknowledged and the project benefits will be promoted throughout.
Problems and concerns will be regularly addressed and changes will be introduced and initiated
as needed.

I: Change Agent Role

Depending upon what the future brings, I am not sure how long I will remain at the organization.
I would like to share the idea of change and try to inspire actions. I will not be involved in the

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implementation process, or part of the change team. Currently, I am not involved in any
organization decisions or discussions. Becoming more a part of the organization takes time and
this may therefore make my place in the project minimal.

Inspiring change within the organization would involve showing management what the problem
is with plenty of factual evidence and data to support the need for change. Once the change is
accepted, my role could include motivating others and promoting the change. This would involve
demonstrating to others how easy and effective the new systems are once learning how to use
them correctly.

Being involved with the change team and being involved in the change process is probably not
something that I will be able to do. Given my position in the organization and the way changes
take place, I will not be involved in the official process. This makes being a leader for the change
harder. To make up for this, I would focus my attention to motivating others to lead the change
and help anyone who seems to be struggling with the change. This will help promote effective
processes for the change and the overall outcome of the project.

How involved I am in the change process is out of my control. This decision would fall into
managements hands, along with the responsibility of the project. I play a larger role in inspiring
the project idea and motivating others to accept the change. My formal involvement in the
process would likely be limited. This is mainly due to how organizational structure and decision
making is set-up within the organization. I may have the ability to inspire a change, but it is
unlikely that I would be officially involved in the change process.

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What I learned from this project:

This project has given me a better understanding of how change takes place within an
organization. It is a complex process, even for a small change. There are many factors to be
consider before making changes. This is why change happens on a slower pace within larger
organizations. When making changes, it is important to understand how it may impact those
within the company. Resistance to change is generally what causes transformations to fail. This
means that when making a change, there must be a devoted effort to providing an understanding
of the change, how it will benefit the people within the organization, and how it will take place.
Communication is an essential element to making any change, large or small. Along with this,
planning is another important aspect of successful change. I have also learned that in order for
change to take place, there must be substantial evidence and statistics to represent the need for
change. Even though many problems exist within all organizations, large and small, there must
be a specified need in order for a change to occur.

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Overall, this project has taught me the basic process which much occur for change to take place.
Without structure to change, the change will not be successful. Change also requires a manger to
ensure that the process is taking place as it was intended to, to make sure those impacted by the
change understand the process and why its necessary, and to organize the change process. It is
also important to develop a change agent network. These people are essential to a smooth change
process and help to overcome the obstacle of resistance. The process of organizational change is
detailed and requires a devoted team effort, this project help demonstrate this to me and the
workings of how change takes place.

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References

Company Profile. Costco Wholesale Investor Relations. Retrieved April 20, 2014, from
http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-homeprofile