- January 25, 2017
- Posted by: matogconsulting
- Category: Financial Advisory
What are the indicators that we need to change our current business strategies, when should we effect the change, how should we implement the change and how often should we change, are some of the most challenging questions that every business owners or managers must provide workable answers to, in today’s business world. The ability to develop, communicate and implement workable answers to all the above questions will determine if the business organization concerned will grow and survive in the market place, and the inability to provide workable solutions will mean being swallowed up by competition. The need for constant and necessary changes is even more pronounced in the technology based industries where mind blowing and hearth warming discoveries and innovations are the order of the day. Join me in this series, as we explore the endless world of Change Management and its imperatives for businesses that must live in the future.
Change management is the process of identifying the need for change, developing the strategies required to effect the change, communicating the change with the individuals that will be affected by it, in other to ensure little or no resistance and implementing the change in a manner that would ensure that the objectives of the change exercise are achieved. The first practical thing to do in changing a particular business operational procedures, changing a product or service line, is to identify the drivers or need for a change, there must be absolute sensitiveness to the internal environment, the industry in which the business is operating and the general conditions in the market for the business products and, or services to be able to spot the signs that changes has to be made. For the purpose of this article I will simply classify the signs for or drivers of change into internal and external symptoms for changes.
INTERNAL SYMPTOMS FOR CHANGE: Whether in a multi-national company or in a small business enterprise the general internal signs that change is needed includes: (1) fall in production volume or services rate, arising from fall in the morale of employees, (2) increase in the numbers of products rework, products recall and products returns by customers, indicating poor production or service systems, (3) significant increase in the numbers of unconverted and unsold inventories, (4) increase in employees turnover rate and (5) decrease in revenue, increase in operating costs and significant decrease in operating profits, etc.
EXTERNAL SYMPTOMS FOR CHANGE: The occurrence of any of the following events may indicate that a company needs to change its business strategies: (1) an emergence of a strong and vibrant substitute product or service, (2) a change in production methodology, arising from a change in technology, (3) competitors actions (4) a fall in market shares, indicating changes in customers taste, and (5) a change in or a new government policy that has adverse effects on the business operations.
Successfully identifying and resolving that a change is necessary is a good steps to evolving a company business in other to eventually deliver its growth strategy, and after which comes the next question of “when to change”. A company can decide to be a Market Leader (First Time Mover), thereby, bearing the risk of failure and the glory of success, or can decide to be a Challenger (Follower), challenging every innovative move of its competitors, or can decide to be a Nicher, innovating and satisfying the needs of a particular market group, or a geographical area. A company that wants to be a Market Leader or First Time Mover must pursue Active Change policies, by setting a time frame for over-hauling its product(s) and, or service(s) and must be ready to commit significant resources on research and development to be able to develop alternative and cheap means of delivering it business goals and objectives. A company that chooses to be a challenger or follower should pursue Reactive Change policies and must monitor the activities of their competitors to be able to respond swiftly to every of their innovative moves. While the company that seeks to be a Nicher must develop highly effective defensive tactics to make the niche market unattractive to any competitor.
The question of “how to implement the change“, can be provided answers to by adopting any of the suitable Change Management Models, which include; (1) Kurt Lewin’s Unfreeze-Change-Refreeze Model. (2)ADKAR Model (3)Kotter’s 8 Steps Model of Change (4) 7 Habits Model and (5) Force Field Analysis, etc. The successful implementation of changes may necessitate the use of Change Management Experts within the organization, or a Change Management Consultant. And lastly, the question of “how often should we change” is a matter of Board Room Decisions which must be made in consideration of the prevailing global and national circumstances in the industry that the company operates in.
Naghabun, Osayande is a Chartered Accountant, blogger, writer and business development professional. He loves helping Small and Medium Enterprises to grow. He can be reached on 08148358201 for further discussion on this subject. Or send an email to firstname.lastname@example.org