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Planning for business change

Steve Coomber

Evolution: Planning change in your business

Whether you make incremental changes or decide to shake up your entire business, one thing is for sure – changing your organisational DNA is essential if you’re going to survive, says Steve Coomber

In January 2012, the Eastman Kodak Company closed the shutter on its 130-year-old business and filed for Chapter 11 bankruptcy.

The firm that made photography for the masses possible through innovations in photographic film and pocket cameras had finally succumbed to game-changing advances in technology. Simply put, Kodak failed to change with the times.

It was not that Kodak was incapable of innovation, though – it invented one of the first digital cameras in the 1970s and was instrumental in developing early digital camera technology.

Instead Kodak’s problem was a failure to see the big picture.

It was unable to embrace the radical change required for survival, as that would entail cannibalising its own business.

Kodak’s plight, like that of many other firms, highlights the need for companies to be adaptable and capable of change in an increasingly competitive global economy.

The more you can involve people at an early stage – around why you are making a change, and understanding the need and urgency for change – the better

In the organisational equivalent of Darwin’s survival of the fittest, organisations must be the best adapted to their environment or risk failure.

Of course, not all change needs to be so radical. Much change is about doing what you do already, but doing it better.

Dr Michael Jarrett is an affiliate professor of organisational behaviour at INSEAD, author of Changeability: Why Some Companies Are Ready for Change - and Others Aren’t, and an expert on strategic change. Jarrett talks about top teams operating in fairly routine and stable environments who engage in first-order change – incremental change that involves “very small processes”.

First-order evolutionary change is underrated, suggests Jarrett.

“There is a lot of scope for people to gain value from doing lots and lots of small changes. It is an exploitation strategy. It is about, ‘what we’ve got works well, and what we need to do is to milk the assets that we have, while continually fine tuning to get that extra bit’.”

Little by little

Evolutionary change is the bread and butter change that happens almost imperceptibly in organisations – the next improved model of a product, or the incremental improvements to service, for example.

As Jarrett points out, McDonald’s has largely prospered over time through small changes while retaining the same basic service, rather than undergoing any revolutionary change.

There is a lot of scope for people to gain value from doing lots and lots of small changes.

Dr Michael Jarrett, affiliate professor of organisational behaviour, INSEAD

Alternatively, though, the top team may be operating in a context where there is considerable flux, turmoil and trepidation in the market, says Jarrett, in which case faster, more radical second-order change is required.

And when it comes to business survival in the face of an industry-transforming event, it is usually revolutionary change that is called for.

This type of change, while more destabilising for both the business and individual managers, does not always turn out to have negative consequences.

Sometimes change driven by outside influences can prove positive if organisations respond quickly enough.

Beth Carruthers, director of employment services at Remploy, has been involved in several large scale changes at the government- owned employment placement services organisation.

Carruthers identifies several stages involved in a radical change intervention.

The first phase involves recognising and identifying the opportunity or need to change.

“You have to be really clear about what your business mission is. Why does your business exist? What is it trying to achieve? And then look at the options in front of you and decide which direction to go in,” she says.

Next, organisations should consider the possible change options. “A big risk is thinking that there is a single way of doing things,” says Carruthers.

“Developing and evaluating your change options is a really important step. That looks at what a particular option will deliver in terms of impact, the risks, what might be lost and what you might gain. From that you should emerge with a preferred option.”

At the same time a team is usually appointed to lead the change programme. It should be a mixed group of people from across the business, at different levels and with different disciplines.

“The more you can involve people at an early stage – around why you are making a change, and understanding the need and urgency for change – the better,” says Carruthers.

“You need to get people involved, get them thinking about change, so you are preparing people for a more specific and detailed change plan.”

Special agents

One useful way to develop engagement with the change process is to identify potential “change agents” within the organisation.

Stephen Brooks, a specialist in people management at PA Consulting Group, has worked on a number of change programmes and advocates the use of change agents.

He says it became a useful technique while working on a project with UK Visas, where part of the visa issuing process conducted in British Embassies around the world was outsourced to the private sector.

“The civil servants in UK Visas now had to work with those outsourcers – it was a very big change to the way they were working,” says Brooks.

As part of this process, people who could act as change agents within UK Visas were identified. Brooks says these agents needed to be a contact point, a cheerleader, an expert and a helper all at once.

“You’re looking for people at different levels in the organisation, not senior people necessarily, who’ve got the right kind of temperament and skill sets,” adds Brooks.

“They need to be people who are respected by colleagues and have credibility with other staff. They will be trained in change management, helping them to understand what people are going through from a psychological perspective. They’ll also know about the change itself, what’s behind it and why, how it’s envisioned it will work, and what that’s likely to mean for the organisation.

"The change agents fill in the bits about how it will affect particular jobs, because they will know and understand those roles and jobs better.”

Spotting stop signs

Finally, working through the change phases, there is implementation, oversight and performance measurement.

At Remploy, for example, there is a programme board.

The organisation has a programme of change activity, and the programme board meets once a month and reviews the progress of each of the major change programmes on the agenda for the next couple of years.

“We have a Red Amber Green (RAG) report,” says Carruthers.

“The programme board is there to ask questions if anything is delayed, to unblock anything that is getting in the way. Each project has its own project steering group with a dedicated project manager.

"They typically have technical project management training and a core team of people who are there to do the implementation for them.

"Those programme managers provide reports to the programme board, which allows the senior team to put the right level of governance in to make sure that everything is going as it should.”

Alongside attention to the mechanics and psychology of the change process, some factors are also critical to enable a successful change initiative.

Good communication, for example, is essential throughout, especially from the leaders of change.

Jill Waymire Paine, a professor of organisational behaviour at the Instituto de Empresa business school in Spain and author of Everything That You Need to Know About Change, has researched the role of leaders during the change process, including the need for communication.

“Once the need for change is recognised, the challenge for the leader is to communicate it to the right parties and in the right succession.

We know from research that you have to have a reason for change or people do not change. There has to be a legitimate business case for change, and to change now,” she says.

Once you have made the case for change, she adds, the next step is to outline the vision – where do you see the organisation going, and at the end of this change what does it look like?

“Both the reasons for change and the vision have to be present and effectively communicated,” she says.

The challenge here is that leaders may be better at communicating one or other of these messages, and they need to acknowledge this and either work on the other or find a co-leader to deliver the other message.

Ready to engage

Finally, at the heart of any change process, there must be engagement with the people undergoing change.

Chris Wakerley is the managing director of Boxwood, an award-winning consultancy firm with a track record of helping implement successful change initiatives

“To get to the solution, you need a lot of engagement,” he says. “Assuming that you are able to engage with the wider business, you need to start engaging them to build the platform that will support the change.

"That platform is really talking about engaging a broader church of people – the coalition of the willing. So build the coalition of the willing, and build engagement. You need to build understanding about what you’re trying to do – so people understand why they need to change.”

Change is never easy, but people will accept it so long as they believe in it.

Capture the hearts and minds of employees, and understand the nature of the change process, and it is possible to adapt and survive through change – revolutionary or evolutionary.

Rather than simply fade away, like an old Kodak photograph.

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