12 Apr Assessing the Need for Change
Change is vital for survival in competitive modern markets, that is certain, however, when, what and how to change is not always as clear. Deciding the specifics about what change to pursue is a task all leaders must undertake at some point, and can have substantial effects on business performance. Believing your product or service will remain at the top of the market due to its dominance today is one of the greatest risks to any organisation – the demise of Blackberry is an excellent example of that. For this reason, leaders should always have an eye on when change needs to occur to ensure they remain successful and never fall into the trap of relying on the formula of past successes.
Reasons for change
The desire for change often comes from within an organisation, known as internal factors. This may be as new technology is acquired or a merger has taken place which opens up new opportunities. New personal in senior management positions can also initiate change as they see a new direction for the business, as can problems arising from existing processes. Changes can also affect locations, staff and values. Despite a change initially occurring in one of these areas, it will most likely have repercussions on various other areas of the business, as explained by the McKinsey 7-S Framework.
External factors also have the power to initiate change within an organisation. Any manager only looking for internal triggers to initiate change is likely to fall into trouble. One common example of this is changing demand patterns, which often dictate a changing direction for the business. Being the first to react to this kind of change can often reap lucrative rewards. Competition also regularly drives change as markets quickly become saturated and creating an alternative to your competitors become necessary to ensure success. Changing technology also often initiates change, the development of the internet (and the ‘Information Age’) being one of the clearest examples of this. Laws and regulations that come into place can also force change, although this can often be costly and detrimental to the organisation. Economics conditions, notably the Global Financial Crisis in 2008, also have the power to force organisations into change as they react to changing demand, supply and government policies.
It is important managers are constantly aware of internal and external factors that may present the opportunity for successful change, or force it upon them. Neglecting either one of these can leave opportunities missed and ultimately leave the organisation behind their competitors.
What to change?
Knowing exactly what to change is the next step after identifying that there is a reason to make a change. For example, a manager may spot falling demand in one of their products and know a change needs to be made. However, whether changing their marketing strategy, the quality of the product or diversifying their range to reach new markets is the solution is the next difficult decision. Action research, where individuals across the organisation work together to identify and implement solutions, has historically been the main method use to implement changes. Appreciative inquiry, on the other hand, identifies what the business is doing well and encourages the business to play to their strengths. Beckhard’s Confrontation Meeting and The Five Whys of Identifying Change are also methods of determining exactly what should be changed.
Corrigan, S. (2012). The Need for Change – Trends That Are Endangering your Business. Vanguard Scotand. Print.