Positioning Your Organization for Change
By Keith L. Scott, MBA
All organizations compete for revenue. Non-profits compete for the generous donations of philanthropist, churches compete for divinely inspired tithing, state and local governments compete for high net worth tax payers, and business entities whether big, small, or somewhere in between compete for loyal customers. The common fact remains for any organization - revenue is the lifeblood. Despite the intentions of socially responsible entities donators, congregations, and customers all want a return on their investment. Volunteers and monetary donors will find competing organizations that implement the intended wishes of the giver; church members will tithe to competing religious establishments that serve their spiritual aspirations; tax payers will move to locations that will provide them with better social services; and customers will patronize businesses that provide products and services that satisfy their perceived needs. All of these individuals are customers in some form whose needs and expectations change. Organizations have to answer to those changes by being agile and responsive. In order to do so, they must have the proper framework in place to quickly respond to customers perceived needs and expectations. These expectations can be educating additional students with computers donated to a non-profit organization, providing temporary housing within the church for a less fortunate family, building better schools for students, or merely a caring follow-up call from your physician after an appointment.
Most organizations do not have a change framework model in place that will allow them to respond to customers quickly. Often times the response is reactive instead of predictive. When establishments practice reactive management, market share is lost, the brand is damaged, people move their families to other districts, and revenue is compromised. In order to successfully create a change framework model, organizations have to adopt a culture that accepts change as a natural methodology that is part of doing business.
The first step in determining whether your organization has a change framework is to do an initial assessment of its agility. However, before any change management process can be implemented, all key stakeholders in the organization must be fully engaged with the strategy. The major areas that must be in place and evaluated to support a change framework in an organization are
• Human and Technical Resources
• Incentives and Consequences
• Action Plans
Leaders of any organization must support a culture change conducive to maintaining a customer-focused enterprise. They have to establish a commitment to change strategies and structure the organization so that its mission and vision are implemented properly. Occasionally the established vision and mission have to be revisited and adjusted to accommodate new directions and opportunities as they present themselves.
Leadership must visibly and verbally support an environment focused on continuous improvement. They must communicate the goals of the organization to “Change Champions” whose responsibility is to communicate and support executive strategy for change throughout the organization. Leaders are properly positioned for change when they have established the ability to continuously evaluate ways of becoming more effective and efficient over time.
Human and Technical Resources
A good indicator to whether an organization is properly positioned to manage change is measuring the amount of investment in training for its employees. Not only are organizations competing for customers, but they are also competing for employees. Increasing the intellectual capital of your human resources is imperative to effectively compete in the market place. Investing in your employees will position them to identify, understand, and implement strategic change. If employees are asked to take part in change they must have the skills necessary to fulfill this commitment.
In addition, new innovations in technology will help an enterprise operate more efficiently. Another indicator on the sincerity of executives to establish a change framework is to monitor the investment in information technology. The proper use and investment in technology assets creates an organization that is agile and provides the capacity to monitor, predict, and implement change strategies.
Incentives and Consequences
Change is a very difficult obstacle to overcome for any individual. In fact, the biggest impediment to change is when the “old way” of doing things continues to produce results regardless of efficiency. While competitors are investing in processes that enable employees to bring products and services quicker to the market place, employees tend to be concerned about their individual responsibility without regard to the efficiency of the enterprise. There must be incentives in place to have employees embrace change and the “new way” of doing things. Without such incentives, change occurs very slowly or not at all. The result can be fatal for any organization. Incentives reinforce new behaviors and help institutionalize processes. Conversely, there should also be consequences for not administering change. These consequences can be monetary, advancement within the organization, or termination.
The most important step in establishing a change framework is the development of a strategic action plan. If the proposal for change has been communicated throughout the organization very little will be implemented without a detailed action plan. The action plan will provide a road map for the organization and how it will be deployed, implemented, and measured continuously to determine when additional change is required in the future.
Before any action plan is implemented, the readiness of the organization must be assessed. You must determine the impact of implementing the strategy along with the impact of not implementing the strategy. Additional assessments are required to determine the priority of changed processes, the existence of the required technical and human resources, the complexity of the change, the timeline for delivering the change, and the budget required to implement the change.
Once the culture has been established and the change framework is completely embraced by management, an organization can exist in a more agile form with the ability to respond to the needs of its patrons quickly. Remember, financial indicators such as gross revenue, earnings per share (EPS), and earnings before interest and taxes (EBIT) are lagging indicators and do not provide insight into the future performance of an organization. Management must continuously monitor non-financial indicators such as customer satisfaction, employee retention, business process efficiency, and adapt to the demands of a changing market place. Without the preparation for change, an organization is at the mercy of a market that will reward the winners with infinite profits or punish the losers into bankruptcy.